The rules for distributions and what is taxable in the US depend on what type of IRA this was. If your father had a traditional IRA - the type that generates taxable income when you take withdrawals - then you have these options:
1. Take the money now. You will pay ordinary income tax on the amount.
2. Roll your portion of your father's IRA account into a new "Inherited IRA" in your name. This may be advantageous if you don't need the money now, as the account can continue to appreciate in value tax-deferred. The timing and amounts of required distributions depend on your father's age at time of death, One option is to start taking an annual distribution by Dec 31 of next year. Or if your father was less than 70-1/2 years old at the time of death you have the option of waiting 5 years at which point the entire amount is distributed to you. If your father was older than 70-1/2, then you must start distributions prior to Dec 31 of next year.
Although you have to pay income tax each year as you receive distributions there is no early witrhdrawal penalty. Based on your statement that you can use the money now, it may be best (and simplest for you long term) to take the money now.
If your father actually had a Roth IRA (as opposed to a traditional IRA) the rules are different. For a Roth IRA if the money in the account has met the 5-year holding period then any distributions you take will be tax-free. As with a traditional IRA, you can take the money now, or roll it to an inherited IRA and take mandatory distributions later.
You might find this information pamphlet helpful. Refer to pages 5 and 9 to see your options for inheriting an IRA: http://www.schwab.com/cms/P-1625576....=P-1625576&cv6
I do not know how Israel would treat this income, but my guess (emphasis on "guess") is that you will have to report the income and pay tax on it, but they may give you a credit for foreign taxes paid on it (to the US). I suggest you talk to a tax pro in Israel to understand the implications.